The value of project contracts awarded in the Gulf Cooperation Council countries is set to drop by 15 percent to $140 billion this year compared with $165 billion in 2015 as low oil prices hit government spending plans, MEED Projects report said. The forecast is based on more than 2,100 planned and un-awarded projects in the region. Saudi Arabia will be the worst hit with contract awards predicted to drop by almost $10 billion to reach $40.7 billion in 2016, the report noted. At the beginning of 2015, MEED Projects predicted total contract awards of more than $172 billion for the year, although the actual value amounted to $165 billion. While Kuwait, Oman and Qatar performed broadly as expected, the UAE and Saudi Arabia were substantially lower than forecast. "The biggest underperformer last year was Saudi Arabia. The announced hiatus on contract awards in Q4, plus the postponing of several key projects such as Saudi Arabia's stadium program and the Makkah Metro scheme resulted in a shortfall of nearly $10 billion," said director of Content and Analysis at MEED Projects Ed James. Meanwhile the United Arab Emirates is anticipated to see a 2.5 percent drop in the value of contract awards this year to reach $36.5 billion, the report said. Dubai's commitment to its long-term vision will ensure that spending on projects is maintained despite the worsening financial situation, the report added. Kuwait is slated to be the third largest projects market in the GCC at $24.3 billion, down almost 23 percent from a record high of $31.5 billion in 2015. It will be followed by Qatar, which will see contract awards fall by $7 billion to $22.2 billion. "While the two markets will perform worse than last year, their 2016 forecast is still considerably improved on their five-year spending average," the report added. Oman and Bahrain are anticipated to maintain last year's spending levels at $13.5 billion and $2.8 billion respectively. — SG
